Refinancing or repricing a Singapore home loan: lock-in, fees and tests

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Kooky

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A home loan in Singapore is rarely the same loan from the first instalment to the last. A bank package usually starts with a few years on special terms and then moves to a rate that can change, and at that point the borrower has three choices: leave the loan as it is, ask the same bank for another package, or carry the loan to another lender. The second is called repricing and the third refinancing, and each has its own costs and its own rules.

Those rules are scattered over several official pages. MoneySense, the national financial education programme, explains the loan types and lists the checks to make. The CPF Board sets out what changes when an HDB loan is moved to a bank. The Monetary Authority of Singapore (MAS) decides how the income tests apply when a loan is refinanced, and has published what it expects banks to tell borrowers about rates. This guide puts them in one place, says where the pages stop, and does not repeat the borrowing limits for a new purchase, which are a separate subject.

MoneySense guide to how home loans work (last updated 28 September 2026); CPF Board comparison of the HDB loan and the bank loan (12 June 2026); MAS statement on refinancing rules (1 September 2016).

Repricing and refinancing are two different moves

MoneySense's guide to how home loans work, last updated on 28 September 2026, defines the two words. Refinancing is moving the loan to a new lender that offers lower rates. Repricing, which the guide also calls conversion, is changing package while staying with the current bank. The CPF Board's comparison of the HDB loan and the bank loan, published on 12 June 2026, uses the words the same way: a borrower can reprice with the same bank to try to get a lower rate, or refinance with a different bank for lower rates or more favourable terms.

The distinction is more than vocabulary, because the paperwork behind each move is different. A refinancing replaces one lender with another, so the new lender assesses the borrower afresh and the old lender's terms on leaving come into play. A repricing keeps the lender and changes the terms. MoneySense's page on the switch to SORA notes one consequence: when a borrower changes package with the same bank, the mortgage servicing ratio and the total debt servicing ratio do not need to be recomputed. When the loan goes to another institution, the page tells borrowers to check that institution's terms and whether an exemption from the debt servicing test applies.

There is one move that is not on the list at all. MoneySense states that HDB flat buyers are not allowed to refinance an existing bank loan with an HDB loan. That rule, and the route in the other direction, has its own section below.

How a bank loan's rate is built

Every comparison between packages starts from the kind of rate each one carries. MoneySense divides bank loans into fixed-rate loans and floating, or variable, rate loans. An MAS information paper of November 2021 on residential mortgage pricing and disclosure, describes the same families in more detail.

A fixed-rate loan is fixed only for a time. MoneySense describes the fixed rate as a promotional rate that holds for the first few years, after which the loan becomes variable. The two CPF Board pages read for this guide put slightly different lengths on that period: the comparison of 12 June 2026 says usually one to three years, and the Board's article on three questions for managing a housing loan, published on 26 September 2025, says about two to three years. Either way, MoneySense's point stands for the whole period: while the rate is fixed it does not go down if market rates do. The MAS paper states the other side of the bargain, which is that the monthly instalment stays the same for those years.

A floating rate, in the MAS paper's description, has two parts: a reference rate and a spread. The paper adds that a variable rate can be varied by the financial institution at any time. What differs from package to package is the reference rate. It is pegged either to a market indicator or to what MAS calls an administered rate, one that the financial institution determines. The paper gives the fixed deposit rate and the internal board rate as its examples of administered rates.

SORA, the Singapore Overnight Rate Average, is the market indicator that now matters. MoneySense describes it as the volume-weighted average borrowing rate in Singapore's unsecured overnight interbank cash market, administered by MAS since 2005, based on actual transactions and published daily at 9am. Loan packages do not use the raw daily figure. They are priced on the compounded average of daily SORA over one, three or six months, and because the rate is an average, MoneySense says it tends to be less volatile than the older benchmarks, which reset on a single day's rate. The page gives the formula in one line: the all-in rate is the reference rate plus the loan margin.

Board rates, 30 days' notice and the fact sheet

A board rate differs from SORA in who moves it. SORA moves with the interbank market and is published by MAS. A board rate or a fixed deposit rate is decided by the bank. The MAS paper of November 2021 sets out what the regulator expects in return for that discretion. Banks should clearly disclose which components of the rate can be revised and what would trigger a revision, should say whether the administered rate differs from one package to another, and should tell borrowers that at least 30 days' notice will be given. For administered-rate mortgages, the paper encourages banks to show customers how the rate has changed in the past relative to market rates. Internally, banks should set triggers for reviewing the rate, such as changes in their cost of funds or in market rates, and should document why a rate was changed.

The 30 days appear on the consumer pages too. MoneySense says banks must inform borrowers in advance, usually 30 days, before changing the interest rate on a housing loan. The CPF Board says banks in Singapore usually give about 30 days' notice. The MAS paper traces the minimum to the Code of Consumer Banking Practice.

MoneySense suggests four questions for any floating package: how the reference rate is derived, how often it resets, when it changes, and which special features may later be removed or amended. The CPF Board's list for a borrower thinking of leaving an HDB loan is close to it, and adds the effect on monthly repayments, the lock-in period and penalties, the refinancing options, and a breakdown of the effective interest rate over the loan tenure.

Most of the answers are meant to be in one document. MoneySense says banks must provide a property loan fact sheet before the borrower signs a bank home loan. According to the guide it shows the loan amount and tenure, the total repayment, the lock-in period, the interest rate and its schedule, an illustration of what a change in rates does to the instalment, the effective interest rate and the penalty fees. The MAS paper names the rule behind it, MAS Notice 632A, and says the fact sheet states the lock-in period, the type of reference rate, and whether the bank can change the reference rate type or the spread. MoneySense's advice is to ask the bank to go through the fact sheet line by line.

Lock-in periods and the cost of leaving early

A lock-in period is the stretch of a bank loan during which leaving costs money. The CPF Board puts it at typically around one to three years. It says that repaying a bank loan early, or refinancing it, within the lock-in period may bring a penalty of around 1.5% of the outstanding loan amount, and that terms vary by bank and by loan package. It adds that refinancing with another bank is usually only possible after the lock-in period.

The penalty is quoted as a share of what is still owed, so its size in dollars follows the loan. As a worked example with illustrative figures, a penalty of 1.5% on an outstanding balance of S$500,000 is S$7,500.

Whether leaving early is worth that sum depends on how much the new rate saves. The following worked example makes four assumptions: an outstanding loan of S$500,000, 20 years left to run, level monthly instalments, and a move from a rate of 3.2% a year to one of 2.7%. At 3.2% the instalment is about S$2,823 a month. At 2.7% it is about S$2,699. The difference is about S$125 a month. A penalty of S$7,500 equals about 60 months of that difference. The example leaves out every other cost of moving and assumes both rates stay where they are for the whole period, which a floating rate does not promise. These are illustrative figures, not market rates.

A new package can bring a new lock-in. MoneySense tells borrowers to ask whether a new lock-in applies when they convert or refinance.

The HDB loan works differently on this point. The CPF Board states that an HDB loan has no lock-in period and no early repayment penalty, and that a lump-sum repayment or a full redemption carries no additional charges.

Legal fees, valuation fees, subsidies and clawbacks

The penalty is one cost among several. The CPF Board lists the others a borrower should factor in when moving a loan: legal fees, valuation fees, and potential clawbacks of subsidies or rebates from the first bank. MoneySense's list of what to ask the current bank has four items: penalties, clawbacks, legal fees and conversion fees. The conversion fee is the one that belongs to repricing, since the loan stays where it is and only the package changes.

None of the pages read for this guide puts a figure on legal fees, valuation fees or conversion fees, and none says for how long after a loan is taken a subsidy can be clawed back. The CPF Board gives no amounts, and MoneySense gives none either. The figures are in each bank's own documents, and the fact sheet is where MoneySense says the penalty fees are set out.

Bundled products are part of the same sum. When comparing packages, MoneySense says to review the fact sheet for early-repayment penalties and for products tied to the loan, and gives the mortgagee interest policy as an example.

Refinancing also touches CPF savings. MoneySense's last check is to read the terms and to look at the CPF Housing Withdrawal Limit that applies on refinancing. The pages read here do not explain how that limit is worked out when a loan is moved.

From an HDB loan to a bank loan: a one-way move

A borrower with an HDB loan stands in a different position from one with a bank loan. The HDB concessionary loan is available to buyers of HDB flats only. Its rate, according to MoneySense, is pegged at 0.1% above the CPF Ordinary Account interest rate and is revised when CPF rates change. The CPF Board gave the rate as 2.6% a year in September 2025 and again on 12 June 2026.

Leaving that loan for a bank is allowed. The CPF Board says an HDB loan can be refinanced to a bank loan at any time, subject to the bank's approval. With no lock-in and no early repayment penalty on the HDB side, the costs of the move lie with the new loan.

The CPF Board's two pages show how far bank rates have moved in a few years. In 2020 and 2021 some homeowners secured rates below 1.5% a year, the Board says, and in 2022 and 2023 rates rose sharply, with some borrowers seeing rates above 4% a year. The chart below turns those two markers and the HDB rate into instalments on one loan.

On these assumptions the same loan costs S$156 a month less than the HDB rate at 1.5%, and S$214 a month more at 4%. The CPF Board's advice before switching is to check how much repayments could rise once the fixed-rate period ends, and whether the household budget can absorb the rise.

How TDSR and MSR apply on refinancing

Two income tests stand behind every property loan in Singapore. The total debt servicing ratio (TDSR) limits all monthly debt repayments, the home loan included, to 55% of gross monthly income, as the CPF Board's pages state it, with combined income used when two people apply together. The mortgage servicing ratio (MSR) caps home loan instalments at 30% of gross monthly income; the CPF Board's article of September 2025 describes it as applying only to HDB flats and to executive condominiums still within the minimum occupation period.

MAS's explainer on who the TDSR applies to says the rules cover all loans applied for on or after 29 June 2013, and that the test is required for loans to buy a property, for loans secured on a property, and for the refinancing of those loans. Refinancing is therefore inside the framework. What MAS has done is carve out exemptions from the threshold.

The owner-occupier exemption reached its present width in 2016. In a statement dated 1 September 2016, MAS said the exemption had until then covered only owner-occupied homes bought before the TDSR was introduced, and that it was being extended to all owner-occupied residential properties, including those bought afterwards. The reasoning MAS gave is that these loans had already been assessed under the TDSR when they were first granted. The same statement extended the concession to the 30% MSR limit for loans on owner-occupied HDB flats and executive condominiums. The changes took effect immediately.

For investment property the door is narrower. The 2016 statement lets a borrower refinance above the threshold, whenever the property was bought, on two conditions. The borrower commits to a debt reduction plan with the financial institution to repay at least 3% of the outstanding balance over a period of not more than three years, and the borrower passes the institution's credit assessment. A loan secured on the borrower's equity in a property is treated the same way. As a worked example, on an outstanding balance of S$600,000 the plan must repay at least S$18,000 within three years. These terms superseded an arrangement announced on 10 February 2014, under which borrowers had a transition period ending 30 June 2017.

MAS was careful about the limits of the change. The statement says it applies only to refinancing and is not an easing of the property cooling measures, and that the framework continues to apply to new property loans. It named the threshold as 60%, the figure in force on 1 September 2016; the CPF Board's pages of September 2025 and June 2026 give 55%. The statement, in MAS's words of 2016, calls the TDSR "a structural measure to encourage prudent borrowing by households."

Loans that were pegged to SOR or SIBOR

Some older loans changed reference rate without the borrower asking. SORA replaced two earlier benchmarks, the Swap Offer Rate (SOR) and the Singapore Interbank Offered Rate (SIBOR), as the key benchmark for Singapore dollar loans. According to the MAS paper of November 2021, banks stopped offering new SOR loans from the end of April 2021 and new SIBOR loans from the end of September 2021. MoneySense records that SOR was discontinued on 30 June 2023, and that one-month and three-month SIBOR were discontinued after 31 December 2024.

For residential loans still on SOR, the banks offered a SORA conversion package and, MoneySense says, automatically converted the loans that had not been switched so that nothing was disrupted. The package replaces one-month, three-month or six-month SOR with three-month compounded SORA, keeps the borrower's margin, and adds an adjustment spread. The spread exists because SOR included term and credit risk and SORA does not, which is why SORA is typically the lower of the two. As at 1 September 2022, the spreads MoneySense lists were 0.9593% for one-month SOR, 1.3319% for three-month SOR and 1.7073% for six-month SOR. Switching to the conversion package with the existing bank carried no additional fee and no lock-in.

The conversion package is not the only choice. MoneySense notes that borrowers can still move to other packages, fixed or floating, including those based on board or fixed deposit rates, even after an automatic conversion. Its own example is a borrower whose converted loan stands at three-month compounded SORA plus 1.33%, set beside a package at three-month compounded SORA plus 1%. The second is 0.33 of a percentage point cheaper. On a balance of S$500,000 that is about S$1,650 of interest in a year, as a simple illustration that ignores the falling balance. The page's instruction is to compare all-in rates and not only margins, and to check for lock-in periods before deciding.

Three checks MoneySense lists before refinancing

MoneySense arranges the work to be done before any move into three checks. They apply as much to a borrower who ends up staying as to one who leaves.

The first check has a second half. MoneySense says to ask the current bank whether a new lock-in would apply after a conversion, and to ask for proof that the borrower would be better off. The burden of showing the gain is placed on the offer and not on the borrower's guess.

Paying down part of the loan instead

Changing the rate is not the only way to change the instalment. MoneySense's guide sets partial prepayment beside refinancing: a lump sum paid against the loan can lower the monthly payments and the interest paid over the long run. The first step it gives is to check for penalties, which brings the borrower back to the lock-in terms and the fact sheet.

The guide's example starts from S$800,000 outstanding with 25 years left, and assumes the rate rises to 5% a year for all of that time. A prepayment of S$40,000, which is 5% of the balance, brings the monthly payment to S$4,440 and saves S$30,150 of interest in total. A prepayment of S$80,000, or 10%, brings it to S$4,210 and saves S$60,300. For comparison, computed on the same assumptions for this guide, the instalment with no prepayment would be about S$4,677 a month. MoneySense adds that the result is subject to the terms of the loan.

What the official pages leave open

Several things a borrower would want to know are not on the pages read for this guide, and they are left out for that reason.

No official figure was found for legal fees, valuation fees, conversion fees or cancellation fees, nor for the length of a clawback period. The penalty of around 1.5% is the CPF Board's approximate figure and the Board says terms vary. The full text of MAS Notice 632A, which sets the content of the fact sheet, and of MAS Notice 645, which sets the TDSR rules, could not be opened; they are described here only through MAS's own paper, statement and explainer. MAS's dedicated explainer on refinancing rules could not be opened either, so points such as loan tenure on refinancing are not covered.

The MAS explainer on the TDSR does not list the conditions for refinancing an investment property; those come from the 2016 statement, which predates the present 55% threshold. HDB's own page on moving a loan to a financial institution was not read, so any HDB procedure or fee for redeeming its loan is absent.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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